NHS priorities and trade offs for the year ahead

No matter what you do today, this is critical reading…a simple to read report with some great graphs surrounding the priorities and trade offs for the year ahead. As managers, it is crucial that we understand the environment that the NHS will be operating in over the next year.

Whilst the government is responsible for determining the level of NHS funding, it is the responsibility of NHS England (NHSE) together with the Clinical Commissioning Groups (CCGs), who currently control over two thirds of this budget across England, to ensure that optimal use is made of this funding. A recent meeting of the NHSE Board (please read the report here) discussed the 2018/19 financial position in light of the extra money allocated in the Chancellor’s budget.

November’s budget produced an extra £1.6 billion revenue for the NHS, and delivered £354 million of public capital for next year. This means NHS revenue growth for 2018/19 will be 1.9% (against growth of 2% this year), but after factoring in the growing and ageing population across England, in real terms this revenue growth is 0.9% in 2018/19 and -0.4% for 2019/20. Whilst the extra revenue is welcome it does not meet the amount requested to deliver the Five Year Forward View.

In March, the ‘Next Steps on the NHS Five Year Forward View’ provided the NHS with a 10 Point Efficiency Plan, which is showing progress; Trusts are reducing agency staffing costs, NHSI is supporting improvements in procurement, and action is being taken to manage the costs of medicines. The care integration agenda is starting to demonstrate results and Vanguards are showing slower per capita emergency hospitalisation growth. Eight new Accountable Care Systems (ACS) have been identified whilst CCGs are showing reductions in elective referrals. With these positive results in mind, NHSE will ensure that the care redesign work being undertaken by ACS and STPs continues with the support of the additional 2018/19 Budget cash.

NHS administration costs are amongst the lowest in the developed world, and the move towards integrated care has the potential to reduce them further. NHSE will work closely with NHSI to look at how combining and sharing work can provide further reductions.

However, these actions alone will not resolve the financial pressures facing the 2018/19 NHS Budget, and therefore the NHSE Board has put forward the following considerations:

Deal with current levels of unfunded care (deficits) that need funding going in to next year – CCGs are funding around £500m more patient care this year than they have been allowed to budget for, after the holdback of a £560 million commissioning underspend. However patients will continue to need these services, so they will in practice have to be funded from the £560 million.

Set realistic activity plans for growth in emergency care– work in reducing demand for A&E is now paying off with attendance growth this year a third less than its historic growth rate. There is evidence that the clinical threshold for emergency admission has risen by over 10% in the last five years, but the current pressures on social care and the end of vanguard transformation funding in April 2018, will prove challenging.

Seek to protect planned investment in mental health, cancer, and primary care– this includes the National Mental Health Investment Standard and the service expansions promised in both Mental Health and GP Forward View.

Be realistic about what can be expected from the remaining available funds – ensure any policies/goals are attainable and contain a clear affordability and workforce assessment.

Ensure that where government sets pay rises above the currently budgeted 1% cap these are separately funded.

NHSE will work closely with DH, NHSI, NHS leaders, staff, patients and public to ensure the above considerations are developed clearly and transparently and, following a public update in February 2018, they will agree the NHS England priorities and operating plan for 2018/19 in March 2018.